South America’s two biggest economies are imposing heavy-handed trade restrictions. Our first article looks at Argentina, our second at Brazil

IN RECENT years BlackBerrys have become an essential component in the young professional's toolkit in Buenos Aires. But if you failed to buy one before the southern-hemisphere winter, you may be out of luck. “We have trouble getting them,” says an assistant at a Claro mobile-phone store in posh Recoleta. “We haven't had them for months,” is the answer at a Personal shop in leafy Palermo. Movistar advertises the 8520 model on its home page, but the phone is in fact sold out.

At South America's southern tip, the missing BlackBerrys are almost ready to roll off the line. On October 3rd Brightstar, a multinational manufacturer, will begin importing kits of the phones' parts to its factory in Tierra del Fuego, the normal base for cruise ships going to Antarctica. Some 300 workers will brave the frigid austral fog to assemble the pieces and put them in locally sourced packaging.

Making BlackBerrys south of the Magellan strait will cost $23m upfront, plus $4,500-5,000 a month per worker, some 15 times more than in Asia. But the government touts the project as a triumph of its trade policy. It will help cut foreigners' share of Argentina's mobile-phone market from 96% in 2009 to a forecast 20% by the end of 2011. “We have a domestic market with growing demand. The goal is to supply it with local labour and production,” said Débora Giorgi, the industry minister, when the deal was announced.

Argentine manufacturers have been booming ever since the 2001 crash. Over most of that period, a cheap peso has ensured their competitiveness. But since 2005 inflation has been in double digits. As the trade surplus has dwindled, Cristina Fernández, the president, has beefed up her industrial policy. According to Global Trade Alert, a database of restrictions on international commerce, Argentina now imposes more trade limitations deemed “harmful” than any country save Russia.

Even before Ms Fernández's late husband, Néstor Kirchner, became president in 2003, Argentina was taxing farm exports. The policy was meant to raise revenue. But the Kirchners later justified it as a way of discouraging commodity exports in favour of manufacturing. In 2008 Ms Fernández sparked protests by trying to raise taxes on soyabeans, Argentina's chief export, and lost a congressional vote. Since then the country has restricted maize and wheat exports, leaving farmers with an estimated 4m tonnes of maize they can neither sell at home nor ship abroad. Beef exports have also been limited, which caused ranchers to stop raising cattle and led to lower leather output and beef consumption. Many foreign leather firms, such as Italy's Italcuer, have left.

On the import side, Argentina cannot raise tariffs on its own because it belongs to the Mercosur customs union. So it is resorting to informal tools. Its main method is “non-automatic licensing”, a tactic recognised by the World Trade Organisation that lets countries delay imports for 60 days.

Argentina has made no pretence of honouring that time period. In January it expanded the list of products requiring licences from 400 to 600. It was a limit on phone imports that led Research in Motion to hire Brightstar to make BlackBerrys in Argentina (tax incentives then led the firm to Tierra del Fuego). Other affected goods include toys, pharmaceutical ingredients, tyres, fabrics, leather and farm machinery. On September 15th Argentina blocked imports of books, and over 1m piled up at the borders. Imports of Harley-Davidson motorcycles are frozen until 2012.

For firms that refuse to (or cannot) move production to Argentina, the government offers another option: deals to export goods worth at least as much as a company's imports. In January customs officials stopped letting Nordenwagen import Porsches. Its cars languished in port for three months before the firm succumbed to a deal. Since its owners also possess Pulenta Estate, a vineyard, they agreed to launch a new line of mass-market wines for export, erasing the family's trade deficit. They are also considering canning fruits. “It's not the same margins as fine wines, but it takes time and investment. We're trying to make it profitable,” says Eduardo Pulenta, the company's export manager. “We'll keep working to import cars. That's what we know how to do.”

Copying from Brazil, the next target of Argentina's new protectionism will probably be land. In April the government put forward a bill to cap total foreign landholdings at 20% of the country's territory, and to stop any individual from acquiring over 1,000 hectares (2,471 acres). It makes no exemption for technology transfers. And it counts any firm with over 25% foreign ownership as an outside buyer, forcing the government to track every trade in the shares of public companies near the limit. Investors in mining, which many Argentines tout as the “new soyabeans”, are nervous. The bill has not been approved. But in next month's election Ms Fernández is expected both to win again and to increase her party's share of seats in Congress.

The net effect of these policies is hard to measure. Since 2005 imports have grown faster than exports. But that gap might have been bigger without the trade limits. The industry ministry says Argentina has substituted $5 billion of imports a year since 2009 (1.4% of GDP). Local consumers bear most of the cost, although some will fall on taxpayers now that the government is offering loans to exporters at negative real interest rates. Marcelo Elizondo, head of the UCES business school in Buenos Aires, says the interventions have affected the trade balance only slightly. “But it's a deterrent,” he says. “It's a general message for everyone who wants to import that it will be expensive and complicated, and you're better off producing here.”